Interventionism Destroys Democracy, Destroys Society

Yesterday I discussed how the doctrine of interventionism has corrupted and virtually destroyed our bureaucracy. In this context I referred my reader to Ludwig von Mises' pamphlet on interventionism.

But bureaucrats only serve politicians in our democratic system. Today, let us therefore deepen our analysis to how interventionism affects democracy. Mises examined this too in the above pamphlet, written in the USSA in 1940, but published posthumously. He says, in the chapter on the consequences of interventionist policies, in the section titled "Parliamentary Government and Interventionism":

The idea underlying representative government is that the members of parliament are to represent the whole nation, not to represent individual counties or the particular interests of their constituencies. The political parties may represent different opinions about what helps the whole nation, but they should not represent the particular selfish interests of certain districts or pressure groups.

The parliaments of interventionist countries are today quite different from this old ideal. There are representatives of silver, cotton, steel, farming, and labor. But no legislator feels it his duty to represent the nation as a whole.

This is true not only for the USSA, but also for India. The true interests of all members of a society lie in social co-operation under the division of labour. The duty of the government is to foster this co-operation. What interventionism does is to divide society into hundreds of minority interest groups, each battling for benefits at the expense of the mass of consumers. This destroys democracy; it destroys society.

Mises says:

Government by the people can, therefore, only be maintained under the system of the market economy. In the market economy only the interests of the citizens as consumers are considered. No producer is granted a privilege, because privileges given to producers diminish productivity and impair the satisfaction of the consumers. No one suffers if the cheapest and best satisfaction of the consumers is accepted as the guiding principle of policy; what producers then fail to gain as producers, because privileges are denied to them, they gain as consumers.

With rampant interventionism, the interest of consumers is sacrificed in favour of those of small groups of producers. A good example is the import tariff - and the curious case of Kamal D Nutt, WTO-wrecker. Who does Kamal D Nutt represent? His own constituency lies in poverty-stricken, backward, land-locked Madhya Pradesh, where the people would definitely benefit from free trade as consumers. He certainly does not represent them. He also does not represent the innumerable coastal port cities of India, which would all become Hong Kongs with unilateral free trade. If examined closely, it will be found that he represents a small minority of producers who have bribed the CONgress. This party does not uphold the true interests of all Indians, only because of interventionism.

My old friend, Professor Christopher Lingle, has enunciated the "Lingle's Law" on interventionism. There are two posts on this on the Natural Order Blog, Part 1 here, and Part 2 here. In brief, the law goes as follows:

Government intervention-> Distortion -> Impact on special interest groups -> demand for government intervention-> Distortion -> Impact on special interest groups -> demand for government intervention -> Distortion ->Ad infinitum /ad nauseum ….

He offers many examples of these harmful interventions, from agricultural subsidies to asset bubbles. All these affect democracy. All these affect peaceful co-operation in society. All these, especially import tariffs, affect the international division of labour and foment irreconcilable conflicts between nations. Note how Kamal D Nutt was "irreconcilable" at the WTO.

Thus, not only domestic society, but the Great and Open Society comprising all the peacable nations of the world are affected by interventionism. It should be halted forthwith in our own country. Laissez faire, laissez passer is the only way forward.